http://www.NewsAndOpinion.com --
TO avoid "another Enron," President George W.
Bush proposes measures to "help" workers
protect their 401(k) money. Under Bush's
proposals, companies must allow workers, if
they choose, to sell company stock after three
years, a shorter period than many current
pension plans allow. Additionally, Bush's
measures bar management from accessing their
401(k) funds if employees cannot do so. "If it's
OK for the captain," said Bush, "it ought to be
OK for the sailor."

Yes, according to The Wall Street Journal,
management "froze out" Enron employees for a
period of 10 trading days as the company
changed plan administrators. The union
employees, however, say the "freeze-out"
period lasted longer. In either case, many Enron
employees sat motionless while the company
stock fell from a high of nearly $90 in August
2000, to $13.81 when the "freeze-out" period
began. It declined another $3.83 during the 10
trading days of the freeze.

Moreover, nothing compelled employees to
invest 100 percent of their 401(k) plans in
company stock. The company offers several
different options, enabling employees to
diversify.

Also, not all analysts bought the Enron bluster.
In March 2001, Fortune magazine writer Bethany
McLean wrote, "But for all the attention that's
lavished on Enron, the company remains largely
impenetrable to outsiders, as even some of its
admirers are quick to admit. Start with a pretty
straightforward question: How exactly does
Enron make its money? Details are hard to come
by because Enron keeps many of the specifics
confidential for what it terms 'competitive
reasons.' ... 'If you figure it out, let me know,'
laughs credit analyst Todd Shipman at S&P. ...
'Enron is an earnings-at-risk story,' says Chris
Wolfe, the equity market strategist at J.P.
Morgan's private bank, who, despite his remark,
is an Enron fan. 'If it doesn't meet earnings, [the
stock] could implode.'"

Perhaps more annoying, the Bush
administration proposal likens investing 100
percent of one's 401(k) plan to that of gambling.
Many Microsoft workers, for example, believed
in the CEO, the company and its prospects.
Several workers decided to throw their whole
financial lot in with Gates. They assumed,
correctly in Microsoft's case, that given their
youth, if they stumbled they could recover.

In "It's Getting Better All the Time," authors
Stephen Moore and Julian L. Simon write about
a man who never made more than $14,000 a year
working at UPS, and enriched himself with the
"all-eggs-in-one-basket" approach: "He plowed
every penny of savings he had back into UPS
stock (he really should have diversified), and
when he reached the age of 90 in 1992, he
shocked his relatives and friends by announcing
that his net worth was close to $70 million."
Portfolio managers strongly advise
diversification. Still, should the government say
no to those who choose not to?

Such a philosophy made many young
multimillionaires all across this country. The
Bush rules compromise that dream, and
restrains those willing to take such an
"investment" or "risk."

How ironic. These laws stop mutually agreeing
employer and employee from reaching an
acceptable level of their formula for risk and
compensation. Yet many states run lotteries,
selling tickets at odds of 100 million to one.

Activists like Reverend Al Sharpton and
Reverend Jesse Jackson urge government (read:
taxpayers) to make Enron employees whole.
The government failed to exercise proper
oversight, they argue, therefore taxpayers must
pony up. "There must be a commitment by the
government to bail them out," said Sharpton, " ...
They can certainly find money for victims who
would not have been victimized if the
government had protected them." So, under the
Sharpton philosophy, if the cops fail to stop a
burglar from stealing your stereo, the
government forces your neighbors to pass the
hat to buy you a new one.

But does this apply to everybody? After all, 78
National Football League players, according to
U.S. News & World Report, lost over $42
million in three years through fraud by trusted
advisers. Let's make them whole, too.

The Enron disaster hurts the movement toward
privatization of Social Security. After all, goes
the argument, given the "uncertainty of the
future," a government-provided social safety net
prevents a mishap, disaster, setback and chaos.
But for the risk-averse, what about government
bonds or notes? Besides, a government bailout
creates other unintended consequences. Why
bother watching one's portfolio? Why bother
diversifying? If an investor screws up, just go to
the government and demand reimbursement.

By all means, bring charges against the Enron
characters who engaged in criminal conduct.
But memo to Americans: It's your money, learn
to watch
it.